Question: please help. 1. Company ABC has determined that a majority of its customers are located in a big metro area. Therefore, it is considering using

please help.

1. Company ABC has determined that a majority of its customers are located in a big metro area. Therefore, it is considering using a lockbox system offered by a bank in the city center. The bank has estimated that the use of the system will reduce collection time by four days.

Average number of payments per day: 700

Average value if payment: $1,400

Variable lockbox fee (per transaction): $0.2

The daily interest rate on money market securities: 0.45%

What is the NPV of the New Lockbox system?

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